Victory! Court Finally Throws Out Ultramercial’s Infamous Patent on Advertising on the Internet

On September 9, 2009, a patent troll called Ultramercial sued a bunch of Internet companies alleging infringement of U.S. Patent 7,346,545. This patent claims a method for allowing Internet users to view copyrighted material free of charge in exchange for watching certain advertisements. Yes, you read that correctly. Ultramercial believed that it owned the idea of showing an ad before content on the Internet.

In the years that followed, the litigation became a central battleground over the legitimacy of abstract software patents. The Federal Circuit, in opinions written by former Chief Judge Randall Rader, twice found the patent valid. The Supreme Court vacated both of these rulings and sent the case back for reconsideration (the second time after its landmark patent-eligibility decision in Alice v. CLS Bank). As the case bounced back and forth, EFF filed four amicus briefs (1, 2, 3, and 4) urging the courts to find the patent invalid.

Today, on its third try, the Federal Circuit finally held the patent invalid. This is a big victory for common sense and innovation. Tying an elementary business practice (like showing an ad before a video) to the Internet doesn’t deserve patent protection. We congratulate the successful defendant, WildTangent, for its victory. Its win means that Ultramercial can no longer assert this patent against anyone.

The ruling is also significant because the Federal Circuit upheld the district court’s decision to dispose of the case on a motion to dismiss (although the appeal dragged on for years, the trial court did a good job and threw out the case quickly). This gives defendants a tool to dispose of cases early and makes it harder for patent trolls to use the cost of defense to extort settlements.

This case joins other recent decisions applying Alice v. CLS Bank to invalidate abstract software patents. The patents thrown out so far are a rogue’s gallery of absurdly broad software patents (like bingo on a computer or upselling on a computer). Contrary to the hyperbolic warnings from some fans of software patents, the death of abstract patents has not led to the death of innovation. While Alice v. CLS Bank does not solve all problems with the patent system, it at least rids the system of many of the silliest software patents. Other than patent trolls, no one needs these patents to do business.

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